New Case Law Impacts Interpretation Of "Use" In Canada With Hotel Services

The recent decision in non-use proceedings, in Bellagio Limousines v. Mirage Resorts Inc.¹ adds a new wrinkle to issues of trademark use for hotel and travel-related services in the absence of a physical location in Canada. In addition, the decision suggests that the Trade-marks Opposition Board (the Board), in both opposition and non-use proceedings, will take a close look at the nature of services offered in Canada (including retail store services) when the primary contact with consumers is via the Internet.

At issue was whether there was use of two trademark registrations owned by Mirage Resorts Incorporated (MRI) relating to the Bellagio Hotel in Las Vegas. One registration covered: 

MRI’s evidence showed that it operates the Bellagio Hotel in Las Vegas, and spent significant sums to advertise and promote the BELLAGIO mark in Canada, particularly through its website. Numerous Canadians visit the hotel each year and book vacations through the website. A second affidavit confirmed that MRI’s website was available to Canadians during the relevant period.  Further evidence from a Toronto-based travel agent attested that he personally visited the Bellagio hotel and booked vacations for Canadian clients at that property.

According to the Registrar, “while technology has progressed to the point where one can enjoy the retail experience without ever having to leave one’s home, there is no evidence that hotel services have made such progress; a brick-and-mortar presence in Canada is required for hotel services. A hotel cannot operate via the internet or a 1-800 telephone number.”  Even though the mark was well-known in Canada, MRI’s advertising and promotion did not amount to use of hotel services unless MRI actually operated a hotel in Canada. The registration was maintained only in association with “promotional and guest relation services, namely hotel and casino reservation and booking services.”  The registration for wares was entirely expunged.

This decision indicates that the Board will take a narrow view of hotel services: a trademark owner must be able to show that it is ready, willing, and able to perform the services in Canada. Even very well-known marks cannot be maintained on the basis of Canadian promotional activities alone, notwithstanding that many Canadians visited the United States hotel.

It is arguable that this decision ignores a significant body of prior case law finding that, for travel-related services, trademark use does not require a physical location in Canada.

In Venice Simplon-Orient-Express, Inc. v. Société Nationale des Chemins de fer Français SNCF², the Registrar maintained the trademark registration ORIENT EXPRESS covering “travel services, namely railway and passenger service” despite the fact that the Registrant did not have a place of business in Canada, and operated the rail service only in Europe.  The Registrant promoted its railway services through seminars delivered to Canadian travel agents, who then made reservations for their Canadian customers on the Registrant’s European trains.  The Federal Court maintained the registration on appeal. The Registrant showed that the booking service was an important part of its passenger railway services and allowed Canadians easy access to the European rail tours.  The Court held that “travel services, namely railway passenger service,” encompasses incidental or ancillary services such as train ticketing and train reservation services, even when provided through an intermediary Canadian travel agency.

Similarly, a Registrant maintained its ADVANTAGE RENT-A-CAR trademark registration for “automobile rental services and automobile leasing services” even though all of the Registrant’s businesses were located in the United States.³ The Registrant submitted client lists demonstrating reservations made by Canadian travel agencies; copies of cheques made payable to Canadian-based travel agencies; and credit applications and invoices showing reservation and lease services rendered directly to Canadian customers. On this basis, the Registrar found that the Canadian travel agencies acted as intermediaries providing the Registrant’s services to the ultimate Canadian consumer, amounting to use of the mark in Canada.

In 2006 the Registrar maintained another registration for hotel services in Borden Ladner Gervais LLP v. WestCoast Hotels, Inc.⁴ The Registrant showed that Canadians made reservations on its website for WESTCOAST hotels in the United States, and participated in the Registrant’s loyalty program in Canada. Importantly, the Registrant recently licensed the mark as a secondary or house mark for hotels in Canada.  The Registrar found that “hotel services” should not be narrowly interpreted; the performance of reservation services and of loyalty program services both constituted the performance of hotel services.

Conclusion

Website advertising, and even offering reservation services online, may be insufficient to obtain or maintain a trademark registration for “hotel services” without an actual hotel presence in Canada. Even well-known and famous mark registrations could be subject to cancellation, if the registrations cover only “hotel services." Trademark owners who do not operate Canadian properties should ensure that their applications specifically include reservation services, and might also consider strategies to meet “use” requirements, such as licensing their mark to local businesses. Evidence of registered Canadian website users, or Canadians enrolled in loyalty programs may also benefit foreign trademark owners. 

Footnotes

^{12012 TMOB 220
2(1995), 64 CPR (3d) 87 (TMOB), affirmed 9 CPR (4th) 443 (FCTD)
3Advantage Car & Truck Rental v. Advantage Rent-A-Car
4(2006), 53 CPR (4th) 361 (TMOB)}

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.